Initiative’s Mat Baxter: ‘The media industry needs to stop being lazy and get off the drug of reach’
The ‘laziness’ of media and advertising agencies could spell the industry’s downfall in the face of consumers’ changing brand expectations, the global CEO of Initiative has said.
Speaking at Mumbrella360 Asia on the role of culture in a consumer-centric world, Mat Baxter suggested that agencies that simply prioritise reach over relevance will be left competing for survival.
He said brands are realising that a true connection with audiences is more important than vanity metrics that make client reporting easier.
“Reach is bloody easy, any idiot, with all due respect and I am one of those idiots, can build a plan that delivers reach because all you need is money,” Baxter argued. “It is much harder to architect and build a plan and strategy that creates relevance with an audience. The way to do it is by building a bridge through culture. Culture is what makes something matter to the consumer.”
Baxter, the former CEO of UM Sydney who moved to New York to take up a global position within IPG Mediabrands, suggested the only thing holding the industry back from focusing on reach over relevance was laziness.
“Why we can’t build our business on that simplicity boggles me,” he said. “Maybe it’s because reach is like a comfortable pair of slippers. It’s an easier and more comfortable conversation for us as an industry to have with clients. Talk about relevance and we usually discuss having a long way to go. The simple answer: I think we’re lazy.”
He likened reliance on reach metrics to a drug the industry had to get off and also parked part of the blame for this reliance on brands.
“Get off the drug of reach, get off the drug of ratings and unique users, if they didn’t give a crap about what you are doing, it doesn’t matter, it’s waste of money. If we can have that conversation as an industry, we will be in a much better place.
“Let’s go back a step, we still have clients putting GRP, brand awareness and reach as their number one priority on a plan. To me, that is a massive challenge that we all have to tackle. I don’t have the answer, I am being an antagonist on purpose to get the conversation started.”
The issue of relevance over reach has become significantly greater in light of shifting consumer trends, Baxter suggested, with traditional advertising techniques no longer providing the cut through required to move a brand forward.
Instead, brands needed to get into the consumer psyche and create culturally relevant content, something that was infinitely harder to achieve.
Despite this, Baxter was adamant the work was worth the effort. “Brands that do well are brands like Google, Microsoft, Nike, Apple and Facebook. Brands with a high cultural velocity, one standard deviation above the mean, have 61 per cent higher revenue growth than the standard pool,” he said.
He went further to suggest that this was intrinsically linked to the devaluation of the advertising industry, as agencies fought to undercut each other and at times work for free, something that wouldn’t be necessary if what they were offering to clients was of higher value.
“When you are sitting in the room and a client is arguing with you, or normally a pitch consultant, about driving price down another 5% and everyone gets their knickers in a knot and everyone is throwing things all over the place, different offers from different agencies etcetera, there is 61 per cent sitting on the table available to optimise and grow the client’s actual business through smarter planning,” Baxter said.
“Moving away from being so reach driven to being relevance driven is key. The answer isn’t ‘let’s do it cheaper,’ or ‘let’s give our business away for free for a year’. The answer is ‘let’s be smarter’. Let’s use what’s available to us. The science is in and it’s there. Let’s use this to power our client’s brands.”
Why can’t you have both?….
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Reach is a given , a necessity, it doesn’t matter how relevant you are if nobody sees you. Relevance is necessity because it doesn’t matter how many see you if nobody cares. I’ve never met anybody who doesn’t know this. I’ve also never heard of anyone who thinks reach is all you need. I think Mat is talking about a scenario that doesn’t exist.
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Could you please highlight the fact that reach was easier to price for media agencies and most of you senior people have no clue how to price and market relevancy over reach?
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The balancing act of reach verse relevancy has always been the goal and placing a value on relevancy the problem.
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Matt also said in the same presentation that ” Culture builds the bridge to relevance. You can’t adblock culture”. Like the comment made by Alex on this feed, I’m unsure why Matt is stating the bloody obvious and accepted wisdom in the industry.
Which person working in the industry today would argue that culture isn’t the canvas upon which brands should engage and drive relevance vs. marketing to people via comms?
You often have people giving presentations and speaking at panels in Aus saying the same repetitive drivel so that just drives circular conversation.
I expect the industry to demand more then recycled thinking like this offered by Matt and the like.
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Like any communication no matter the media used, you can use reach, GRP,s , CPT , and so on, and every agency /media shop spruik themselves around operating on margins they can’t sustain, and a 20 odd young person ends up processing the schedule the computer told them to. Clients push and push and the now famous purchasing manager who screws everyone else screws media and has not a plaque on the wall to say he/she has the core competencies to do the job. Creative well told is what resonates with Joe Average the 1 that makes the purchase so tell the consumer why they should buy x, tell them in a factual and non stats way, have fun with the brand and see how you go. You might like to test in a focus group so many brands never use. No i don’t own !!!!. I am that old i used to do reach and frequency by hand so how many can go back that far.
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The first thing I learned when I started in an agency back in the ’90s was the “3 R’s” – ratings, reach and relevancy.
So how is this news?
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